Brussels, 03/02/2014 (Agence Europe) - Reza Moghadam, the International Monetary Fund's director for Europe, suggested on Tuesday 28 January at a closed meeting of the European Parliament's economic and monetary affairs committee that the eurozone waited until struggling countries were on the brink of collapse before it intervened.
Moghadam says the member states took such a long time to take action for the countries battered by the crisis because it was unaware of the urgency of the situation.
Commenting on Greece, she said that, in 2010, the IMF called for direct restructuring of the Greek debt, but the ECB opposed the idea. Europe has rejected these accusations a number of times, but in Athens, where an EP delegation is concluding its investigation into the work of the troika in the aid programmes, the former IMF representative to Greece, Panagiotis Roumeliotis, said that the IMF had found itself involved in the Greek aid programme “against its will” and against its own rules, an MEP told this newsletter. The IMF's rules say that the IMF cannot take part in a programme if the country's debt is unsustainable, hence its call for a direct restructuring.
On Ireland, Moghadam said that the IMF had backed the Irish government's request for a bail-in of senior bondholders for recapitalising the Irish banking system. The ECB opposed it. Moghadam says the austerity measures would have been far less of a burden if the bail-in had taken place.
Commenting on Ireland and Portugal, Moghadam said that the IMF had suggested solutions, but they had not been backed by the majority. The solutions decided upon were not the best ones, in the IMF's view.
In June 2014, an IMF report on the first Greek bailout made criticisms of the eurozone. Annoyed, the European Commission said it would draw up its own report, but nothing has yet been forthcoming. (EL/transl.fl)